U.S. News & World Report writes "Yes, Cash Has a Role in Your Portfolio". The piece says, "For investors, cash need not be a four-letter word. After all, without cash -- money in a liquid account you can withdraw immediately without penalty -- you can't seize fleeting market opportunities.... "Don't expect to make any money with it," [`Ahmad Adnan, a certified financial planner with Ameriprise Financial Services] adds. "Clients ask, 'What's the cash earning?' and the answer is 'nothing.'" He and other advisors agree that with interest rates so low, cash accounts are lucky to reap even a fraction of a percentage point. That doesn't make much of a difference when you are parking cash for a few months or a couple of years in anticipation of a major purchase, such as a house down payment. In fact, advisors agree, it's smarter to table the funds in a cash account than risk losing some of it in an equity investment. The rule of thumb, they agree, is that if you need a certain amount of money on a certain date, keep the money in a cash account. "Cash is for short-term circumstances," Adnan says. The flip side is that the longer the cash languishes in the sweep account, the greater the chance you will start to lose money thanks to inflation, advisors say."
